True, because the more variables the better
Explanation:
The Journal entry is given below :-
Bonds payable $2,000,000
To common stock $1,000,000
To Discount on common stock $30,000
To Paid in capital $970,000
The calculation of bonds payable, common stock is below:-
For bonds payable
= 2,000 × $1,000
= $2,000,000
For common stock
= 2,000 × 50 × $10
= $1,000,000
For paid in capital
= $2,000,000 - ($1,000,000 - $30,000)
= $970,000
Answer:
Team cooperation encourages employees to work together for the benefit of the organization. It reduces the desire of employees to complete against each other,which often never good for the business,and instead focus on working together to achieve a common goal.
Answer:
Testerman Construction Co.
Internal rate of return method in analyzing capital expenditure:
Present value of expenditure = $149,630
Present of cash inflows annuity = $149,630 (using 20% discount rate and present value annuity factor of 3.3251 x $45,000)
NPV = $0 (PV of cash outflow - PV of cash inflow)
Therefore, the IRR = 20%
Explanation:
a) Data and Calculations:
Investment cost = $149,630
Annual net cash flows = $45,000
Investment period = 6 years
Annuity of future cash flows = 3.3251
b) Testerman’s IRR (Internal Rate of Return) is a capital budgeting and analysis tool which determines the discount rate that makes the present value of future inflows equal to the present value of outflows from a project. This IRR helps the managers to determine the projects that add value and are worth undertaking. IRR is based on assumptions. Similar projects with the same IRR will differ in returns due to the differences in timing and the size of the cash, the amount of debts and equity used to generate the returns, and the assumption of a constant reinvestment may which IRR makes.
Answer: $144,936
Explanation:
First start by removing the initial debt from the initial basis so as not to inflate the basis.
= 118,800 - 11,880
= $106,920
That is the Initial basis void of debt.
Then add anything that will increase the basis and remove anything that will reduce the basis. Income and debt generally increase the basis while dividends or cash Distributions reduce them.
The Ending basis is therefore,
= Pre debt Initial basis + Partnership Income + ending debt + Nontaxable income - Cash Distribution
= 106,920 + 47,520 + 17,820 + 2,376 - 29,700
= $144,936
Barnaby's basis at the end of the tax year is $144,936.
